Ikea Invests in Store Upgrades, Supply Chain, and AI for Better Customer Experience

The Swedish furniture giant is revolutionizing its operations through investments in technology, customer service, and sustainability.

SMEBROctober 12, 11:08
Ikea Invests in Stores, Supply Chain, and AI to Improve Customer Experience

Ikea, the renowned Swedish furniture retailer founded in 1943, with a global presence spanning 62 markets and 460 stores, has unveiled its dynamic plan for the future. In the fiscal year 2022, Ikea celebrated a 6.5% increase in sales, reaching €44.6 billion. Notably, their stores experienced a remarkable 13% boost in sales, primarily driven by the European market.

Acknowledging the significance of technological advancements, Ikea is actively investing in technology, customer experience, ecommerce, and environmental sustainability. The focal point of this strategy is the customer's well-being.

One prominent change is the introduction of AI-driven customer service. In 2021, Ikea introduced an AI bot named Billie to answer routine customer inquiries. This innovation freed up around 8,500 call center employees to become interior design consultants, while Billie successfully addressed 47% of customer queries.

Recognizing the importance of a solid supply chain, Ikea has allocated €3bn to transform its out-of-town stores into ecommerce distribution centers. This strategic move allows Ikea to increase its order fulfillment capacity, ensuring timely deliveries to customers. 

Additionally, in June 2023, Ikea's owner, Ingka Group, acquired the US-based software brand Made4net, enabling the company to optimize and enhance its online fulfillment operations.

Existing US stores are being modernized to provide convenient home delivery services. This ambitious investment marks a significant milestone in Ikea's four-decade-long presence in the country.

Ikea also aims to promote sustainability within its stores. In February 2023, they introduced an augmented reality (AR) experience in collaboration with Meta and Warpin Reality, aimed at educating customers about marine life and sustainability. This AR game "Lilla Äventyret" (Little Adventure), available in 21 Swedish stores for a limited period, educates customers about marine life and sustainability. By engaging players in themes like littering and pollution prevention, Ikea encourages responsible consumer behavior.

Ikea's innovation strategy encompasses various aspects, including AI-driven customer service, supply chain optimization, store investments, and sustainability initiatives. Ikea is making significant strides by aligning its strategies with the ever-evolving retail landscape.